Working Paper: CEPR ID: DP4716
Authors: Nauro F. Campos; Dean Jolliffe
Abstract: How does the relationship between earnings and schooling change with the introduction of comprehensive economic reform? This Paper uses a unique dataset (covering about 3 million Hungarian wage earners, from 1986 to 1998) and a novel procedure to correct sample selection bias (based on DiNardo, Fortin and Lemieux’s) to shed light on this question. We find that reform was successful in general, increasing returns to skill by 70.5%, but that there were winners and losers. The winners seem to be the college and university educated, those employed by the smaller firms and those in commerce and services. The losers are those in manufacturing and agriculture and, surprisingly, those who received their formal education after the initiation of reform.
Keywords: Economic Reform; Human Capital; Transition Economics
JEL Codes: I20; J20; J24; J31; O15; O52; P20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Economic reform (E69) | Returns to schooling (I26) |
| Returns to schooling (I26) | Earnings (J31) |
| Economic reform (E69) | Returns to education by sector (I26) |
| Returns to education for post-1989 graduates (I26) | Quality of education (I24) |
| Economic reform (E69) | Quality of education (I24) |